Paul L. Caron
Dean


Monday, April 6, 2009

TRAC: IRS Gives Financial Companies an Audit Pass

Transactional Records Access Clearinghouse at Syracuse University, Large Financial Service Corporations Dominate the Corporate World, but IRS Allocates Only a Small Proportion of Its Corporate Auditors to the IRS Group Policing These Companies:

TRAC-IRS In the just-ended fiscal year, more than three quarters of the tax returns filed by the nation's largest corporations came from financial service organizations — banks, insurance companies, investment advisors, brokerage houses, securities services and the like. And the same group of businesses is credited with controlling 72% of all large-corporation assets, with earning 46% of the net income of all large corporations and reporting 33% of the taxes in this area.

Despite the overwhelming place of the financial services sector in the broader corporate world, however, documents and data obtained by the Transactional Records Access Clearinghouse (TRAC) show that in FY 2008 the IRS allocated only 15% of its overall corporate revenue agents to the agency group that has the lead authority for auditing this complex and now troubled segment of the nation's economy (see Figure 1).

https://taxprof.typepad.com/taxprof_blog/2009/04/trac-irs-gives-financial.html

News, Tax, Think Tank Reports | Permalink

TrackBack URL for this entry:

https://www.typepad.com/services/trackback/6a00d8341c4eab53ef01156efc5e06970c

Listed below are links to weblogs that reference TRAC: IRS Gives Financial Companies an Audit Pass:

Comments

Interesting report, and some cause for concern is apparent, but is TRAC using the correct metric when it concludes that financial services firms are proportionally under-audited? It is likely the case that IRS audits of large non-financial corporations focus heavily on the "products" -- many billed as tax-advantaged -- that the financial sector peddles to the non-financial sectors of corporate America. Witness, for example, the current media flap over AIG's marketing of foreign tax credit generators to its corporate clients.

Posted by: Anonymous | Apr 6, 2009 6:05:10 PM

Very nice article.It is likely the case that IRS audits of large non-financial corporations focus heavily on the "products" -- many billed as tax-advantaged -- that the financial sector peddles to the non-financial sectors of corporate America.

http://undiscoveredequities.com/

Posted by: Peter | Apr 7, 2009 11:50:18 PM